Scotts Holdco Ltd - Limited company accounts 20.1
Scotts Holdco Ltd - Limited company accounts 20.1
| REGISTERED NUMBER: 11703491 (England and Wales) |
| Group Strategic Report, Report of the Directors and |
| Consolidated Financial Statements for the Year Ended 31 March 2020 |
| for |
| SCOTTS HOLDCO LTD |
| SCOTTS HOLDCO LTD (REGISTERED NUMBER: 11703491) |
| Contents of the Consolidated Financial Statements |
| for the Year Ended 31 March 2020 |
| Page |
| Company Information | 1 |
| Group Strategic Report | 2 |
| Report of the Directors | 4 |
| Report of the Independent Auditors | 6 |
| Consolidated Income Statement | 8 |
| Consolidated Other Comprehensive Income | 9 |
| Consolidated Balance Sheet | 10 |
| Company Balance Sheet | 11 |
| Consolidated Statement of Changes in Equity | 12 |
| Company Statement of Changes in Equity | 13 |
| Consolidated Cash Flow Statement | 14 |
| Notes to the Consolidated Cash Flow Statement | 15 |
| Notes to the Consolidated Financial Statements | 17 |
| SCOTTS HOLDCO LTD |
| Company Information |
| for the Year Ended 31 March 2020 |
| DIRECTORS: |
| REGISTERED OFFICE: |
| REGISTERED NUMBER: |
| SENIOR STATUTORY AUDITOR: | Robert Pollock BA CA |
| AUDITORS: |
| Statutory Auditors |
| 29 Brandon Street |
| Hamilton |
| ML3 6DA |
| SCOTTS HOLDCO LTD (REGISTERED NUMBER: 11703491) |
| Group Strategic Report |
| for the Year Ended 31 March 2020 |
| The directors present their strategic report of the company and the group for the year ended 31 March 2020. |
| REVIEW OF BUSINESS |
| The Group subsidiary R&W Scott continued it's transformation from loss making into profit in it's first full year under new ownership. |
| Sales continued to increased year on year due to existing business growth and value-added new business in the soft fillings and health arenas. This coupled with improved labour efficiencies and a strong performance in material procurement led to a significant increase in Gross Profit. |
| The R&W Scott business continued its strategy of improved overhead control, with a reduction in total overheads for the third year in a row. This coupled with the increase in sales turnover has allowed the business to improve it's net cash/debt position, and enforce it's standing as a sustainable and profitable business. |
| Key Performance Indicators |
| All key performance indicators both financial and non-financial are covered in the financial accounts. The main items being Turnover £13,054,548 (2019 period : £3,135,144), Gross Profit 32.5% (2019 : 27.11%) and Profit before tax £709,741 (2019 period : £50,600). |
| PRINCIPAL RISKS AND UNCERTAINTIES |
| The directors have outlined their perception on particular risks and uncertainties facing the group below. These risks and uncertainties could cause the actual results to vary from those experienced previously or described in forward looking statements within the annual report. |
| a) Key Customers |
| The business has a number of key customers, some of whom operate on contracts which are subject to annual renewals. As a consequence, the retention of particular customers may change on a year to year basis. |
| b) Raw Materials |
| Raw materials used by the business are subject to price fluctuations. Typically these items are purchased on forward contracts, providing cover for some months ahead generally and in particular to lock in commitments with sales contracts on a "back to back" basis. |
| c) Food Safety |
| As a reputable food trader we enforce our technical policies and procedures in relation to the production and storage of our products. The business recognises the importance and currently holds an A+ grade unannounced BRC accreditation. |
| d) Health & Safety |
| The business could be adversely impacted if it failed to manage the safety of its facility effectively. |
| The directors believe that the safety of the employees, contractors and suppliers is fundamentally important. A business compliance program is in place ensuring that all legal obligations are adhered to. Regular third party auditing takes place to maintain a continuous improvement in standards. |
| e) Changing Consumer Trends |
| The business could be impacted by changing consumer trends, with potential risk areas including concerns over obesity and healthier eating. The business's proactive development and technical teams are well positioned to help mitigate these risks. |
| SCOTTS HOLDCO LTD (REGISTERED NUMBER: 11703491) |
| Group Strategic Report |
| for the Year Ended 31 March 2020 |
| FUTURE DEVELOPMENTS |
| This business will continue to develop a range of new products based on both customer requests and market trends. These include, but are not limited to more bespoke added value soft-fillings and speciality jam recipes as well as broadening our no added sugar protein enriched variants of existing products. |
| This business is expected to continue to benefit from strong, long standing customer relationships, whilst retaining the support of key suppliers. It expects to see an improved cash position and reduction in net debt, whilst continuing to improve the long-term profitability/sustainability of the business. |
| ON BEHALF OF THE BOARD: |
| 23 February 2021 |
| SCOTTS HOLDCO LTD (REGISTERED NUMBER: 11703491) |
| Report of the Directors |
| for the Year Ended 31 March 2020 |
| The directors present their report with the financial statements of the company and the group for the year ended 31 March 2020. |
| PRINCIPAL ACTIVITY |
| The principal activity of the group in the year under review was that of the manufacture and sale of chocolate coatings, specialist soft icings, sauces, jams and dry powder blends for the industrial, retail, wholesale and foodservice markets. |
| DIVIDENDS |
| No dividends will be distributed for the year ended 31 March 2020. |
| DIRECTORS |
| The directors shown below have held office during the whole of the period from 1 April 2019 to the date of this report. |
| DIRECTORS' RESPONSIBILITIES STATEMENT |
| The directors are responsible for preparing the Group Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations. |
| Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to: |
| - | select suitable accounting policies and then apply them consistently; |
| - | make judgements and accounting estimates that are reasonable and prudent; |
| - | prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
| The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. |
| STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
| So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information. |
| SCOTTS HOLDCO LTD (REGISTERED NUMBER: 11703491) |
| Report of the Directors |
| for the Year Ended 31 March 2020 |
| AUDITORS |
| The auditors, Sharles Audit Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting. |
| ON BEHALF OF THE BOARD: |
| Report of the Independent Auditors to the Members of |
| Scotts Holdco Ltd |
| Opinion |
| We have audited the financial statements of Scotts Holdco Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2020 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice). |
| In our opinion the financial statements: |
| - | give a true and fair view of the state of the group's and of the parent company affairs as at 31 March 2020 and of the group's profit for the year then ended; |
| - | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
| - | have been prepared in accordance with the requirements of the Companies Act 2006. |
| Basis for opinion |
| We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. |
| Conclusions relating to going concern |
| We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where: |
| - | the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or |
| - | the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the group's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue. |
| Other information |
| The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon. |
| Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. |
| In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. |
| Opinions on other matters prescribed by the Companies Act 2006 |
| In our opinion, based on the work undertaken in the course of the audit: |
| - | the information given in the Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
| - | the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements. |
| Report of the Independent Auditors to the Members of |
| Scotts Holdco Ltd |
| Matters on which we are required to report by exception |
| In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Directors. |
| We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: |
| - | adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or |
| - | the parent company financial statements are not in agreement with the accounting records and returns; or |
| - | certain disclosures of directors' remuneration specified by law are not made; or |
| - | we have not received all the information and explanations we require for our audit. |
| Responsibilities of directors |
| As explained more fully in the Directors' Responsibilities Statement set out on page four, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. |
| In preparing the financial statements, the directors are responsible for assessing the group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so. |
| Auditors' responsibilities for the audit of the financial statements |
| Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. |
| A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors. |
| Use of our report |
| This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. |
| for and on behalf of |
| Statutory Auditors |
| 29 Brandon Street |
| Hamilton |
| ML3 6DA |
| SCOTTS HOLDCO LTD (REGISTERED NUMBER: 11703491) |
| Consolidated Income Statement |
| for the Year Ended 31 March 2020 |
| Period |
| 29.11.18 |
| Year Ended | to |
| 31.3.20 | 31.3.19 |
| Notes | £ | £ |
| TURNOVER | 4 | 13,054,548 | 3,135,144 |
| Cost of sales | 8,815,452 | 2,285,280 |
| GROSS PROFIT | 4,239,096 | 849,864 |
| Administrative expenses | 3,412,121 | 767,780 |
| OPERATING PROFIT | 6 | 826,975 | 82,084 |
| Interest payable and similar expenses | 7 | 117,234 | 31,484 |
| PROFIT BEFORE TAXATION | 709,741 | 50,600 |
| Tax on profit | 8 | (20,954 | ) | - |
| PROFIT FOR THE FINANCIAL YEAR |
| Profit attributable to: |
| Owners of the parent | 730,695 | 50,600 |
| SCOTTS HOLDCO LTD (REGISTERED NUMBER: 11703491) |
| Consolidated Other Comprehensive Income |
| for the Year Ended 31 March 2020 |
| Period |
| 29.11.18 |
| Year Ended | to |
| 31.3.20 | 31.3.19 |
| Notes | £ | £ |
| PROFIT FOR THE YEAR | 730,695 | 50,600 |
| OTHER COMPREHENSIVE INCOME |
| Fair value adjustment | - | 359,230 |
| Income tax relating to other comprehensive income |
- |
- |
| OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX |
- |
359,230 |
| TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
730,695 |
409,830 |
| Total comprehensive income attributable to: |
| Owners of the parent | 730,695 | 409,830 |
| SCOTTS HOLDCO LTD (REGISTERED NUMBER: 11703491) |
| Consolidated Balance Sheet |
| 31 March 2020 |
| 2020 | 2019 |
| Notes | £ | £ | £ | £ |
| FIXED ASSETS |
| Intangible assets | 10 | (1,991,059 | ) | (2,526,206 | ) |
| Tangible assets | 11 | 4,081,134 | 4,312,880 |
| Investments | 12 | - | - |
| 2,090,075 | 1,786,674 |
| CURRENT ASSETS |
| Stocks | 13 | 1,947,701 | 1,548,836 |
| Debtors | 14 | 2,040,622 | 1,923,261 |
| Cash at bank and in hand | 241,582 | 215,605 |
| 4,229,905 | 3,687,702 |
| CREDITORS |
| Amounts falling due within one year | 15 | 3,965,398 | 3,954,068 |
| NET CURRENT ASSETS/(LIABILITIES) | 264,507 | (266,366 | ) |
| TOTAL ASSETS LESS CURRENT LIABILITIES |
2,354,582 |
1,520,308 |
| CREDITORS |
| Amounts falling due after more than one year | 16 | (975,376 | ) | (884,196 | ) |
| PROVISIONS FOR LIABILITIES | 20 | (156,899 | ) | (144,500 | ) |
| NET ASSETS | 1,222,307 | 491,612 |
| CAPITAL AND RESERVES |
| Called up share capital | 21 | 38,674 | 38,674 |
| Share premium | 22 | 402,338 | 402,338 |
| Retained earnings | 22 | 781,295 | 50,600 |
| SHAREHOLDERS' FUNDS | 1,222,307 | 491,612 |
| The financial statements were approved by the Board of Directors and authorised for issue on 23 February 2021 and were signed on its behalf by: |
| M J Hewitt - Director |
| SCOTTS HOLDCO LTD (REGISTERED NUMBER: 11703491) |
| Company Balance Sheet |
| 31 March 2020 |
| 2020 | 2019 |
| Notes | £ | £ | £ | £ |
| FIXED ASSETS |
| Intangible assets | 10 |
| Tangible assets | 11 |
| Investments | 12 |
| CURRENT ASSETS |
| Debtors | 14 |
| Cash at bank |
| CREDITORS |
| Amounts falling due within one year | 15 |
| NET CURRENT LIABILITIES | ( |
) | ( |
) |
| TOTAL ASSETS LESS CURRENT LIABILITIES |
| CAPITAL AND RESERVES |
| Called up share capital | 21 |
| Share premium | 22 |
| Retained earnings | 22 | ( |
) |
| SHAREHOLDERS' FUNDS |
| Company's loss for the financial year | (63,809 | ) | - |
| The financial statements were approved by the Board of Directors and authorised for issue on |
| SCOTTS HOLDCO LTD (REGISTERED NUMBER: 11703491) |
| Consolidated Statement of Changes in Equity |
| for the Year Ended 31 March 2020 |
| Called up |
| share | Retained | Share | Total |
| capital | earnings | premium | equity |
| £ | £ | £ | £ |
| Changes in equity |
| Issue of share capital | 38,674 | - | 402,338 | 441,012 |
| Total comprehensive income | - | 50,600 | - | 50,600 |
| Balance at 31 March 2019 | 38,674 | 50,600 | 402,338 | 491,612 |
| Changes in equity |
| Total comprehensive income | - | 730,695 | - | 730,695 |
| Balance at 31 March 2020 | 38,674 | 781,295 | 402,338 | 1,222,307 |
| SCOTTS HOLDCO LTD (REGISTERED NUMBER: 11703491) |
| Company Statement of Changes in Equity |
| for the Year Ended 31 March 2020 |
| Called up |
| share | Retained | Share | Total |
| capital | earnings | premium | equity |
| £ | £ | £ | £ |
| Changes in equity |
| Issue of share capital | - |
| Balance at 31 March 2019 |
| Changes in equity |
| Total comprehensive income | - | ( |
) | - | ( |
) |
| Balance at 31 March 2020 | ( |
) |
| SCOTTS HOLDCO LTD (REGISTERED NUMBER: 11703491) |
| Consolidated Cash Flow Statement |
| for the Year Ended 31 March 2020 |
| Period |
| 29.11.18 |
| Year Ended | to |
| 31.3.20 | 31.3.19 |
| Notes | £ | £ |
| Cash flows from operating activities |
| Cash generated from operations | 1 | 669,065 | 199,482 |
| Interest paid | (117,234 | ) | (31,484 | ) |
| Tax paid | 33,353 | (1 | ) |
| Net cash from operating activities | 585,184 | 167,997 |
| Cash flows from investing activities |
| Purchase of intangible fixed assets | - | (3,304,841 | ) |
| Purchase of tangible fixed assets | (252,875 | ) | (21,014 | ) |
| Net cash from investing activities | (252,875 | ) | (3,325,855 | ) |
| Cash flows from financing activities |
| New loans in year | - | 568,833 |
| Invoice discounting facility | - | 1,318,267 |
| Capital repayments in year | (336,344 | ) | 1,075,363 |
| Share proceeds | 30,012 | 411,000 |
| Net cash from financing activities | (306,332 | ) | 3,373,463 |
| Increase in cash and cash equivalents | 25,977 | 215,605 |
| Cash and cash equivalents at beginning of year |
2 |
215,605 |
- |
| Cash and cash equivalents at end of year | 2 | 241,582 | 215,605 |
| SCOTTS HOLDCO LTD (REGISTERED NUMBER: 11703491) |
| Notes to the Consolidated Cash Flow Statement |
| for the Year Ended 31 March 2020 |
| 1. | RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
| Period |
| 29.11.18 |
| Year Ended | to |
| 31.3.20 | 31.3.19 |
| £ | £ |
| Profit before taxation | 709,741 | 50,600 |
| Depreciation charges | (50,526 | ) | (72,918 | ) |
| Finance costs | 117,234 | 31,484 |
| 776,449 | 9,166 |
| (Increase)/decrease in stocks | (398,865 | ) | 73,282 |
| (Increase)/decrease in trade and other debtors | (147,373 | ) | 674,349 |
| Increase/(decrease) in trade and other creditors | 438,854 | (557,315 | ) |
| Cash generated from operations | 669,065 | 199,482 |
| 2. | CASH AND CASH EQUIVALENTS |
| The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts: |
| Year ended 31 March 2020 |
| 31.3.20 | 1.4.19 |
| £ | £ |
| Cash and cash equivalents | 241,582 | 215,605 |
| Period ended 31 March 2019 |
| 31.3.19 | 29.11.18 |
| £ | £ |
| Cash and cash equivalents | 215,605 | - |
| SCOTTS HOLDCO LTD (REGISTERED NUMBER: 11703491) |
| Notes to the Consolidated Cash Flow Statement |
| for the Year Ended 31 March 2020 |
| 3. | ANALYSIS OF CHANGES IN NET DEBT |
| At 1.4.19 | Cash flow | At 31.3.20 |
| £ | £ | £ |
| Net cash |
| Cash at bank and in hand | 215,605 | 25,977 | 241,582 |
| 215,605 | 25,977 | 241,582 |
| Debt |
| Finance leases | (1,075,363 | ) | 301,979 | (773,384 | ) |
| Debts falling due within 1 year | (14,000 | ) | (41,550 | ) | (55,550 | ) |
| Debts falling due after 1 year | (54,833 | ) | (424,085 | ) | (478,918 | ) |
| (1,144,196 | ) | (163,656 | ) | (1,307,852 | ) |
| Total | (928,591 | ) | (137,679 | ) | (1,066,270 | ) |
| SCOTTS HOLDCO LTD (REGISTERED NUMBER: 11703491) |
| Notes to the Consolidated Financial Statements |
| for the Year Ended 31 March 2020 |
| 1. | STATUTORY INFORMATION |
| Scotts Holdco Ltd is a |
| The presentation currency of the financial statements is the Pound Sterling (£). |
| 2. | STATEMENT OF COMPLIANCE |
| 3. | ACCOUNTING POLICIES |
| Basis of preparing the financial statements |
| The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006. |
| The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgement in applying the Group's accounting policies (see note 3). |
| The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements. |
| Accounting standards require the directors to consider the appropriateness of the going concern basis when preparing the financial statements. The directors regard the going concern basis as remaining appropriate as the company has adequate resources to continue in operational existence for the foreseeable future. |
| The following principal accounting policies have been applied |
| Basis of consolidation |
| The consolidated financial statements present the results of the company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full. |
| The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Statement of Financial Position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases. |
| SCOTTS HOLDCO LTD (REGISTERED NUMBER: 11703491) |
| Notes to the Consolidated Financial Statements - continued |
| for the Year Ended 31 March 2020 |
| 3. | ACCOUNTING POLICIES - continued |
| Related party exemption |
| The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group. |
| Transactions between group entities which have been eliminated on consolidation are not disclosed within the financial statements. |
| Shareholders M Taylor, D Wright, H Billington and H Linklater have invoiced £18,000, £18,409, £11,192 and £16,293 respectively during the period in relation to advisory work performed. At the year end, M Taylor was owed £1,500, D Wright was owed £1,500, H Billington was owes £1,000 and H Linklater was owed £5,305. |
| Significant judgements and estimates |
| Management make judgements, estimates and assumptions that affect the application of policies and the carrying values of assets, liabilities, income and expenses. The resulting accounting estimates calculated using these judgements will, by definition, seldom equal the related actual results but are based on the experience of the directors and the expectations of future events. The estimates are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is reviewed. |
| The key judgements and sources of estimation uncertainty are: |
| - The recovery of trade receivables and provision for bad debts |
| Based on the principle that any debtors overdue by more than 120 days will not be recoverable and should be provided for in full. |
| - The provision for redundant and non re-workable stock |
| This is costed on the basis of labour and packaging input costs for re-workable stock and full input cost for stock recognised as redundant. |
| - Investment |
| Determining whether there are indicators of impairment of the Company's investment in its subsidiary and the group's tangible and intangible assets. Factors taken into consideration in reaching such a decision include the economic viability and expected future financial performance of the asset and where it is a component of a larger cash-generating unit, the viability and expected future performance of that unit. |
| - Value of negative goodwill |
| This is determined based on the fair values of the identifiable assets and liabilities acquired. |
| SCOTTS HOLDCO LTD (REGISTERED NUMBER: 11703491) |
| Notes to the Consolidated Financial Statements - continued |
| for the Year Ended 31 March 2020 |
| 3. | ACCOUNTING POLICIES - continued |
| Turnover |
| Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised: |
| Sale of goods |
| Revenue from the sale of goods is recognised when all of the following conditions are satisfied: |
| - the Group has transferred the significant risks and rewards of ownership to the buyer; |
| - the Group retains neither continuing managerial involvement to.the degree usually associated with ownership nor effective control over the goods sold; |
| - the amount of revenue can be measured reliably; |
| - it is probable that the Group will receive the consideration due under the transaction; and |
| - the costs incurred or to be incurred in respect of the transaction can be measured reliably. |
| Goodwill |
| Negative goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer's interest in the fair value of the Group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition when the price paid is less than the fair value of the net assets acquired. Negative goodwill implies a bargain purchase. Subsequent to initial recognition, negative goodwill is measured at cost less amounts released to the Statement of Comprehensive Income. Negative goodwill is released on a straight line basis to the Consolidated Statement of Comprehensive Income over its useful economic life. |
| The estimated useful lives range as follows: |
| Negative goodwill - 5 years |
| Intangible assets |
| Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses. |
| Tangible fixed assets |
| Freehold property | - |
| Plant and machinery | - |
| Computer equipment | - |
| At each balance sheet date, the company reviews the carrying amounts of its tangible fixed assets to determine whether there is any indication that any items have suffered an impairment loss. If any such indication exists, the recoverable amount of an asset is estimated in order to determine the extent of the impairment loss. Where it is not possible to estimate the recoverable amount of the asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs. |
| Expenditure of £500 or more on individual tangible fixed assets is capitalised at cost. Expenditure on assets below this threshold is charged directly to the income account in the period it is incurred. |
| SCOTTS HOLDCO LTD (REGISTERED NUMBER: 11703491) |
| Notes to the Consolidated Financial Statements - continued |
| for the Year Ended 31 March 2020 |
| 3. | ACCOUNTING POLICIES - continued |
| Stocks |
| Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. |
| At each balance sheet date, stocks are assessed for impairment. If stocks are impaired the carrying value is reduced to its selling price less costs to sell. The impairment loss is recognised immediately in the profit and loss account. |
| Financial instruments |
| The Group only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties and loans to related parties. |
| Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or financed at a rate of interest that is not a market rate or in the case of an out-right short-term loan not at market rate, the financial asset or liability is measured, initially, at the present value of the future cash flow discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost. |
| Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Consolidated Statement of Comprehensive Income. |
| For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. |
| Taxation |
| Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
| Current or deferred taxation assets and liabilities are not discounted. |
| Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
| Deferred tax |
| Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. |
| Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
| Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
| SCOTTS HOLDCO LTD (REGISTERED NUMBER: 11703491) |
| Notes to the Consolidated Financial Statements - continued |
| for the Year Ended 31 March 2020 |
| 3. | ACCOUNTING POLICIES - continued |
| Research and development |
| Expenditure on research activities is recognised as an expense in the period in which it is incurred. |
| Foreign currencies |
| Foreign currency transactions are translated into sterling at the rates of exchange ruling at the balance sheet date. |
| At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined. · |
| Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Consolidated Statement of Comprehensive Income except when deferred in other comprehensive income as qualifying cash flow hedges. |
| Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Consolidated Statement of Comprehensive Income within 'interest payable or interest receivable'. |
| Hire purchase and leasing commitments |
| Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease. |
| Pension costs and other post-retirement benefits |
| The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations. |
| The contributions are recognised as an expense in the Consolidated Statement of Comprehensive Income when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Group in independently administered funds. |
| Invoice discounting |
| During the year, the Group had a £2 million invoice discounting facility with Bibby Financial Services secured against trade debtors on a revolving basis with a three month notice period. This facility was secured against the debtors of the business with an interest rate of 3.5% above base rate. Trade debtors remained assets of the business and were shown at the total amount collectable. Liabilities under this arrangement were shown under borrowings. |
| 4. | TURNOVER |
| The turnover and profit before taxation are attributable to the one principal activity of the group. |
| An analysis of turnover by geographical market is given below: |
| Period |
| 29.11.18 |
| Year Ended | to |
| 31.3.20 | 31.3.19 |
| £ | £ |
| United Kingdom |
| Europe |
| SCOTTS HOLDCO LTD (REGISTERED NUMBER: 11703491) |
| Notes to the Consolidated Financial Statements - continued |
| for the Year Ended 31 March 2020 |
| 5. | EMPLOYEES AND DIRECTORS |
| Period |
| 29.11.18 |
| Year Ended | to |
| 31.3.20 | 31.3.19 |
| £ | £ |
| Wages and salaries |
| Social security costs |
| Other pension costs |
| The average number of employees during the year was as follows: |
| Period |
| 29.11.18 |
| Year Ended | to |
| 31.3.20 | 31.3.19 |
| Directors & administration | 28 | 12 |
| Selling & distribution | 12 | 4 |
| Production | 57 | 16 |
| Period |
| 29.11.18 |
| Year Ended | to |
| 31.3.20 | 31.3.19 |
| £ | £ |
| Directors' remuneration |
| Directors' pension contributions to money purchase schemes |
| The number of directors to whom retirement benefits were accruing was as follows: |
| Money purchase schemes |
| Information regarding the highest paid director for the year ended 31 March 2020 is as follows: |
| Year Ended |
| 31.3.20 |
| £ |
| Emoluments etc |
| Pension contributions to money purchase schemes |
| SCOTTS HOLDCO LTD (REGISTERED NUMBER: 11703491) |
| Notes to the Consolidated Financial Statements - continued |
| for the Year Ended 31 March 2020 |
| 6. | OPERATING PROFIT |
| The operating profit is stated after charging/(crediting): |
| Period |
| 29.11.18 |
| Year Ended | to |
| 31.3.20 | 31.3.19 |
| £ | £ |
| Other operating leases |
| Depreciation - owned assets |
| Goodwill amortisation | ( |
) | ( |
) |
| Auditors' remuneration |
| Foreign exchange differences |
| 7. | INTEREST PAYABLE AND SIMILAR EXPENSES |
| Period |
| 29.11.18 |
| Year Ended | to |
| 31.3.20 | 31.3.19 |
| £ | £ |
| Other interest |
| 8. | TAXATION |
| Analysis of the tax credit |
| The tax credit on the profit for the year was as follows: |
| Period |
| 29.11.18 |
| Year Ended | to |
| 31.3.20 | 31.3.19 |
| £ | £ |
| Current tax: |
| UK corporation tax | ( |
) |
| Deferred tax |
| Tax on profit | ( |
) |
| SCOTTS HOLDCO LTD (REGISTERED NUMBER: 11703491) |
| Notes to the Consolidated Financial Statements - continued |
| for the Year Ended 31 March 2020 |
| 8. | TAXATION - continued |
| Reconciliation of total tax credit included in profit and loss |
| The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below: |
| Period |
| 29.11.18 |
| Year Ended | to |
| 31.3.20 | 31.3.19 |
| £ | £ |
| Profit before tax |
| Profit multiplied by the standard rate of corporation tax in the UK of (2019 - |
| Effects of: |
| Adjustments to tax charge in respect of previous periods |
| Non-taxable negative goodwill amortisation | (101,678 | ) | (28,410 | ) |
| Movement on unrecognised deferred taxation | (33,173 | ) | 18,796 |
| R & D tax recovery | (33,353 | ) | - |
| Total tax credit | (20,954 | ) | - |
| Tax effects relating to effects of other comprehensive income |
| There were no tax effects for the year ended 31 March 2020. |
| 29.11.18 to 31.3.19 |
| Gross | Tax | Net |
| £ | £ | £ |
| Fair value adjustment | - | 359,230 |
| At 31 March 2020 there is an unprovided deferred tax asset of £224,790. This asset relates to tax losses and has not been recognised as there is insufficient evidence those losses will be utilised in the foreseeable future. |
| 9. | INDIVIDUAL INCOME STATEMENT |
| As permitted by Section 408 of the Companies Act 2006, the Income Statement of the parent company is not presented as part of these financial statements. |
| SCOTTS HOLDCO LTD (REGISTERED NUMBER: 11703491) |
| Notes to the Consolidated Financial Statements - continued |
| for the Year Ended 31 March 2020 |
| 10. | INTANGIBLE FIXED ASSETS |
| Group |
| Goodwill |
| £ |
| COST |
| At 1 April 2019 |
| and 31 March 2020 | ( |
) |
| AMORTISATION |
| At 1 April 2019 | ( |
) |
| Amortisation for year | ( |
) |
| At 31 March 2020 | ( |
) |
| NET BOOK VALUE |
| At 31 March 2020 | ( |
) |
| At 31 March 2019 | ( |
) |
| The negative good will arising from the acquisition of R&W Scott Ltd is to be released to the Statement of Comprehensive Income over 5 years. |
| 11. | TANGIBLE FIXED ASSETS |
| Group |
| Freehold | Plant and | Computer |
| property | machinery | equipment | Totals |
| £ | £ | £ | £ |
| COST OR VALUATION |
| At 1 April 2019 | 900,000 | 3,475,910 | 13,580 | 4,389,490 |
| Additions | - | 176,609 | 76,266 | 252,875 |
| At 31 March 2020 | 900,000 | 3,652,519 | 89,846 | 4,642,365 |
| DEPRECIATION |
| At 1 April 2019 | 3,213 | 71,651 | 1,746 | 76,610 |
| Charge for year | 58,116 | 410,109 | 16,396 | 484,621 |
| At 31 March 2020 | 61,329 | 481,760 | 18,142 | 561,231 |
| NET BOOK VALUE |
| At 31 March 2020 | 838,671 | 3,170,759 | 71,704 | 4,081,134 |
| At 31 March 2019 | 896,787 | 3,404,259 | 11,834 | 4,312,880 |
| SCOTTS HOLDCO LTD (REGISTERED NUMBER: 11703491) |
| Notes to the Consolidated Financial Statements - continued |
| for the Year Ended 31 March 2020 |
| 11. | TANGIBLE FIXED ASSETS - continued |
| Group |
| Cost or valuation at 31 March 2020 is represented by: |
| Freehold | Plant and | Computer |
| property | machinery | equipment | Totals |
| £ | £ | £ | £ |
| Valuation in 2019 | (2,044,283 | ) | - | - | (2,044,283 | ) |
| Cost | 2,944,283 | 3,652,519 | 89,846 | 6,686,648 |
| 900,000 | 3,652,519 | 89,846 | 4,642,365 |
| If freehold property had not been revalued it would have been included at the following historical cost: |
| 2020 | 2019 |
| £ | £ |
| Cost | 2,944,283 | 2,944,283 |
| Freehold property was valued on an open market basis on 23 August 2019 by Shepherd, Chartered Surveyors. . |
| 12. | FIXED ASSET INVESTMENTS |
| Company |
| Shares in |
| group |
| undertakings |
| £ |
| COST |
| At 1 April 2019 |
| and 31 March 2020 |
| NET BOOK VALUE |
| At 31 March 2020 |
| At 31 March 2019 |
| SCOTTS HOLDCO LTD (REGISTERED NUMBER: 11703491) |
| Notes to the Consolidated Financial Statements - continued |
| for the Year Ended 31 March 2020 |
| 12. | FIXED ASSET INVESTMENTS - continued |
| The group or the company's investments at the Balance Sheet date in the share capital of companies include the following: |
| Subsidiary |
| Registered office: Aberdein Considine, Cloth Market, Newcastle Upon Tyne, England, NE1 1EE |
| Nature of business: |
| % |
| Class of shares: | holding |
| 2020 | 2019 |
| £ | £ |
| Aggregate capital and reserves |
| Profit/(loss) for the year/period | ( |
) |
| 13. | STOCKS |
| Group |
| 2020 | 2019 |
| £ | £ |
| Stocks | 1,947,701 | 1,548,836 |
| 14. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
| Group | Company |
| 2020 | 2019 | 2020 | 2019 |
| £ | £ | £ | £ |
| Trade debtors | 1,818,071 | 1,770,710 |
| Other debtors | 82,830 | 47,400 |
| VAT | 2,069 | - |
| Called up share capital not paid | - | 30,012 |
| Prepayments | 137,652 | 75,139 |
| 2,040,622 | 1,923,261 |
| Trade debtors amounting to £1,549,621 (2019 - £1,593,639) were subject to the invoice discounting facility. |
| SCOTTS HOLDCO LTD (REGISTERED NUMBER: 11703491) |
| Notes to the Consolidated Financial Statements - continued |
| for the Year Ended 31 March 2020 |
| 15. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
| Group | Company |
| 2020 | 2019 | 2020 | 2019 |
| £ | £ | £ | £ |
| Bank loans and overdrafts (see note 17) | 41,550 | - |
| Other loans (see note 17) | 14,000 | 14,000 |
| Finance leases (see note 18) | 276,926 | 246,000 |
| Trade creditors | 1,296,930 | 1,130,200 |
| Amounts owed to group undertakings | - | - |
| Social security and other taxes | 86,333 | 55,963 |
| Other creditors | 451,075 | 1,004,440 |
| Invoice discounting facility | 1,490,217 | 1,381,267 | - | - |
| Accrued expenses | 308,367 | 122,198 |
| 3,965,398 | 3,954,068 |
| 16. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
| Group |
| 2020 | 2019 |
| £ | £ |
| Bank loans (see note 17) | 438,085 | - |
| Other loans (see note 17) | 40,833 | 54,833 |
| Finance leases (see note 18) | 496,458 | 829,363 |
| 975,376 | 884,196 |
| SCOTTS HOLDCO LTD (REGISTERED NUMBER: 11703491) |
| Notes to the Consolidated Financial Statements - continued |
| for the Year Ended 31 March 2020 |
| 17. | LOANS |
| An analysis of the maturity of loans is given below: |
| Group |
| 2020 | 2019 |
| £ | £ |
| Amounts falling due within one year or on | demand: |
| Bank loans | 41,550 | - |
| Other loans | 14,000 | 14,000 |
| 55,550 | 14,000 |
| Amounts falling due between one and two | years: |
| Bank loans - 1-2 years | 41,550 | - |
| Other loans - 1-2 years | 40,833 | 54,833 |
| 82,383 | 54,833 |
| Amounts falling due between two and five | years: |
| Bank loans - 2-5 years | 124,651 | - |
| Amounts falling due in more than five years: |
| Repayable by instalments |
| Bank loans more 5 yr by instal | 271,884 | - |
| SCOTTS HOLDCO LTD (REGISTERED NUMBER: 11703491) |
| Notes to the Consolidated Financial Statements - continued |
| for the Year Ended 31 March 2020 |
| 18. | LEASING AGREEMENTS |
| Minimum lease payments fall due as follows: |
| Group |
| Finance leases |
| 2020 | 2019 |
| £ | £ |
| Gross obligations repayable: |
| Within one year | 351,111 | 403,000 |
| Between one and five years | 626,281 | 1,017,363 |
| 977,392 | 1,420,363 |
| Finance charges repayable: |
| Within one year | 74,185 | 157,000 |
| Between one and five years | 129,823 | 188,000 |
| 204,008 | 345,000 |
| Net obligations repayable: |
| Within one year | 276,926 | 246,000 |
| Between one and five years | 496,458 | 829,363 |
| 773,384 | 1,075,363 |
| Group |
| Non-cancellable operating | leases |
| 2020 | 2019 |
| £ | £ |
| Within one year | 35,000 | 35,000 |
| Between one and five years | 5,000 | 40,000 |
| 40,000 | 75,000 |
| SCOTTS HOLDCO LTD (REGISTERED NUMBER: 11703491) |
| Notes to the Consolidated Financial Statements - continued |
| for the Year Ended 31 March 2020 |
| 19. | SECURED DEBTS |
| The following secured debts are included within creditors: |
| Group |
| 2020 | 2019 |
| £ | £ |
| Bank loans | 479,635 | - |
| Finance leases | 773,384 | 1,075,363 |
| Invoice discounting facility | 1,490,217 | 1,381,267 |
| Stock facility | 433,902 | 500,000 |
| 3,177,138 | 2,956,630 |
| Finance lease and hire purchase creditors are secured on the underlying assets. |
| The bank loan is secured by standard security over the heritable property. |
| The invoice discounting facility is secured against the trade debtors of the group and the stock facility is secured over the groups finished goods stock. |
| 20. | PROVISIONS FOR LIABILITIES |
| Group |
| 2020 | 2019 |
| £ | £ |
| Deferred tax | 156,899 | 144,500 |
| Group |
| Deferred |
| tax |
| £ |
| Balance at 1 April 2019 | 144,500 |
| Charge to Income Statement during year | 12,399 |
| Balance at 31 March 2020 | 156,899 |
| 21. | CALLED UP SHARE CAPITAL |
| Allotted, issued and fully paid: |
| Number: | Class: | Nominal | 2020 | 2019 |
| value: | £ | £ |
| Ordinary | £0.01 | 34,748 | 34,748 |
| A Ordinary | £0.01 | 3,926 | 3,926 |
| 38,674 | 38,674 |
| SCOTTS HOLDCO LTD (REGISTERED NUMBER: 11703491) |
| Notes to the Consolidated Financial Statements - continued |
| for the Year Ended 31 March 2020 |
| 21. | CALLED UP SHARE CAPITAL - continued |
| Each ordinary share has full rights in the company with respect to voting, dividends and distributions. |
| Each A Ordinary share holds rights to a dividend. They do not carry any voting rights. |
| 22. | RESERVES |
| Group |
| Retained | Share |
| earnings | premium | Totals |
| £ | £ | £ |
| At 1 April 2019 | 50,600 | 402,338 | 452,938 |
| Profit for the year | 730,695 | 730,695 |
| At 31 March 2020 | 781,295 | 402,338 | 1,183,633 |
| Company |
| Retained | Share |
| earnings | premium | Totals |
| £ | £ | £ |
| At 1 April 2019 | 402,338 |
| Deficit for the year | ( |
) | ( |
) |
| At 31 March 2020 | ( |
) | 338,529 |
| 23. | PENSION COMMITMENTS |
| The group operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the group in an independently administered fund. The pension cost charge represents contributions payable by the group to the fund and amounted to £157,261. Contributions totalling £1,876 were payable to the fund at the reporting date and are included with liabilities. |
| 24. | ULTIMATE CONTROLLING PARTY |
| By virtue of the spread of shareholders in Scotts Holdco Ltd, there was no one controlling party. The largest shareholder being 32.5% held by M Taylor. |